Shares of the department store chain Nordstrom Inc. (NYSE:JWN) were down 1.74% at the bottom of the noon hour on February 26. However, the stock has climbed 2% week over week after it received a big bump on Friday, February 23. A report revealed that the Nordstrom family is close to a deal that will see the chain go private.
The rise comes ahead of Nordstrom releasing its 2017 fourth quarter and full-year results on Thursday, March 1.
The tease at going private is expected to reinvigorate Nordstrom shares in the short-term, but there are many concerns about the company going forward. The stock is up 11% in 2018 thus far, but experts and analysts are increasingly wary of retail-linked stocks. The rise of e-commerce and a precipitous decline in mall traffic are all developments that present an existential threat for retailers with a significant brick-and-mortar footprint. These factors have resulted in plummeting stocks prices for companies like Macy’s Inc. and J C Penney Company Inc., and 2017 saw Toys “R” Us declare bankruptcy.
In its third quarter earnings Nordstrom saw revenues climb to $3.63 billion which beat analyst expectations. Online sales also jumped 14% year over year while same-store sales dropped 0.9%. It is possible that privatization will see leadership aggressively push for fewer locations while pushing the e-commerce model, where other new retailers like Canada Goose Holdings Inc. are seeing major success.
Nordstrom is a company to watch ahead of its Q4 earnings and the results of its possible push to privatization.
